Net claims of non-residents on India up $4.2 bn at $362 bn at end-December

Net claims of non-residents on India, as reflected by the net international investment position (IIP), stood at $362.0 billion during October-December 2015, an increase of $4.2 billion over the previous quarter.

This change in the net position reflected a $7.4 billion increase in the value of foreign-owned assets in India vis-à-vis a $3.2 billion increase in the value of Indian residents' financial assets abroad, data provided by the Reserve Bank of India showed.

Overseas financial assets of Indian residents increased by $3.2 billion and stood at $532.7 billion at the end of December 2015, helped mainly by an increase in overseas direct investment.

Foreign-owned assets in India increased by $7.4 billion over the previous quarter to $894.7 billion during October-December 2015, on the back of an $11.3 billion increase in direct investment. However, portfolio investment and other investment declined by $0.8 billion and $3.1 billion, respectively, during the quarter.

Variation in exchange rate of rupee vis-a-vis other currencies affected change in liabilities, when valued in dollar terms. While there was net equity inflow of $12.2 billion during the quarter, outstanding equity liabilities increased by $8.6 billion from $402.0 billion in September 2015 to $410.6 billion in December 2015, as outstanding liabilities were revalued due to rupee depreciation during the period.

The ratio of India's international financial assets to international financial liabilities stood at 59.5 per cent in December 2015 (59.7 per cent in September 2015).

Reserve assets continued to have the dominant share (65.8 per cent) in India's international financial assets in December 2015, followed by overseas direct investment (26.1 per cent).

Direct investment (31.6 per cent), portfolio investment (25.1 per cent), loans (19.2 per cent) and currency and deposits (13.7 per cent) were the major constituents of the country's financial liabilities.

The share of non-debt liabilities in total external liabilities increased marginally to 45.9 per cent as of end-December 2015, from 45.3 per cent at end-September 2015.

International Investment Position (IIP) shows the value and the composition of financial assets of residents of an economy that are claims on non-residents, gold bullion held as reserve assets and liabilities of residents of an economy to non-residents at a point of time.

The difference between an economy's external financial assets and liabilities is its net IIP.